Cliff talks hit a lull with Boehner's 'Plan B'

Speaker of the House John Boehner, R-Ohio, joined by the Republican leadership speaks to reporters about the fiscal cliff negotiations with President Obama following a closed-door strategy session, at the Capitol in Washington, Tuesday, Dec. 18, 2012. (AP Photo/J. Scott Applewhite)
— AP

Speaker of the House John Boehner, R-Ohio, joined by the Republican leadership speaks to reporters about the fiscal cliff negotiations with President Obama following a closed-door strategy session, at the Capitol in Washington, Tuesday, Dec. 18, 2012. (AP Photo/J. Scott Applewhite)
/ AP

It would also prevent an expansion of the alternative minimum tax that would otherwise hit 28 million middle- and upper-class Americans with an average $3,700 increase on their 2012 tax returns.

Several rank-and-file House Republicans said the message they heard at an evening caucus was that passing plan B would strengthen Boehner's hand in negotiating steeper spending cuts with Obama.

If the Senate decides not to vote on the House bill or ignores it, "That's not our problem," said Rep. Patrick Tiberi, R-Ohio. "The ball's in Harry Reid's court."

Democrats said Boehner's move made it clear he was abandoning efforts to reach an agreement with Obama - much as he quit talks with Obama 18 months ago.

"Plan B is yet another example of House Republicans walking away from negotiations," said Rep. Chris Van Hollen, D-Md., top Democrat on the Budget Committee.

At the White House, officials remained cautiously optimistic that the talks could get back on track despite Boehner's maneuvering.

Boehner, however, said Obama is the one proving to be too inflexible, even as he held out hope that talks with Obama might yet bear fruit.

"He talked about a `balanced' approach on the campaign trail," Boehner said. "What the White House offered yesterday - $1.3 trillion in revenue for only $850 billion in spending cuts - cannot be considered balanced."

Boehner also displayed new flexibility on the politically explosive issue of raising the Medicare retirement age from 65 to 67. Boehner said the idea - anathema to Democrats - didn't need to be dealt with this year but could be kicked over into a broader negotiation next year.

"That issue has been on the table, off the table, back on the table," Boehner said. "I don't believe it's an issue that has to be dealt with between now and the end of the year."

Just Monday, the Capitol bristled with optimism that Boehner and Obama might strike a bargain.

In a new offer, Obama dropped his long-held insistence that taxes rise on individuals earning more than $200,000 and families making more than $250,000. He is now offering a new threshold of $400,000 and lowering his 10-year tax revenue goals from the $1.6 trillion he originally sought.

The new Obama plan seeks $1.2 trillion in revenue over 10 years and $1.2 trillion in 10-year spending reductions. Boehner aides say the revenue is closer to $1.3 trillion if revenue triggered by a new inflation index is counted, and they say the spending reductions are closer to $930 billion if one discounts about $290 billion in lower estimated debt interest.

The two sides also differ on the estate tax, extending unemployment benefits and how to address the need to raise the government's borrowing cap to prevent a first-ever U.S. default and a re-run of last year's debt crisis.

The White House was facing its own backlash, with labor, liberal and elderly advocacy groups mounting an organized campaign against any adjustments in cost-of-living for Social Security beneficiaries.

"President Obama and other Democrats campaigned saying Social Security doesn't affect the deficit," said Roger Hickey, co-director of the liberal Campaign for America's Future. "Social Security recipients are going to notice and they are either going to blame John Boehner or President Obama."